Gold loses safe-haven shine amid escalating war

KARACHI: Often dubbed a safe haven in times of global crises, local gold prices for 10 grams and one tola have dropped to Rs428,208 and Rs499,462, respectively, down by Rs20,833 and Rs24,300, following a steep decline of $243 to $4,767 per ounce on international markets amid the escalating war in the Middle East.

On Feb 28, when an illegal attack was launched by the US and Israel on Iran, the rates for 10 grams and one tola stood at Rs472,018 and Rs550,562, based on a global gold price of $5,278 per ounce.

On Jan 29, 2026, Pakistan witnessed its highest-ever gold rates, with 10 grams priced at Rs491,135 and one tola at Rs572,862, as the global gold price reached $5,505 per ounce.

“History shows that the precious metal has often lost its luster when intense conflicts escalate into full-scale wars among countries,” said Qasim Shikarpuri, president of the All Pakistan Sarafa Gems and Jewellers Association (APSGJA), while speaking to Dawn on Thursday.

Prices slip below Rs500,000 per tola

Prices slip below Rs500,000 per tola

He said gold prices would plunge further if the war intensifies, adding that another factor behind the decline is the loss of value in Dubai, once considered one of the largest gold markets with strong investor interest.

“The war has changed the dynamics of Dubai. I recently returned from there, where the airport is witnessing low passenger footfall, especially among arrivals. Investors and foreigners are leaving via connecting flights,” he said.

“Foreign investors are selling gold in Dubai as they try to secure their safety and return to their homelands at any cost,” he added. “Previously, gold prices in Dubai used to rise by two to three dollars per ounce due to strong demand. Now, investors holding inventory are willing to sell at up to $40 below the market price to liquidate their assets and exit the market.”

He noted that gold was previously smuggled out of Pakistan due to higher prices in Dubai, but the situation has now reversed as investor activity there has declined, with some awaiting a return to normalcy.

In Pakistan, some investors are taking a risk by buying gold at lower prices, hoping for a rebound after the Middle East conflict subsides, Shikarpuri said.

However, the drop in domestic gold prices has offered limited relief to jewellery buyers, given that rates remain high despite a significant decline from January levels.

Published in Dawn, March 20th, 2026

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